Is NATO a perfect alliance? Is it the best multilateral security organization that we can imagine? Hell no. The Dave and Steve book documents some of the many challenges and the problems inherent in the organization. But discussions of replacing it turn me into a Keohanian Liberal (as opposed to my usual stance as a Moravcsikian Liberal). Huh?
If I remember correctly, Robert Keohane argued that transaction costs often get in the way of bargaining. Each new round of negotiations needs heaps of work just to set up the negotiations. International organizations, by creating rules and procedures, finesse these costs that impede getting to a good bargain. Once an IO is established, they become handy. Countries resist getting rid of them even if their original purpose is no longer quite relevant because it is far easier to adapt an institution than set a new one up. The best example might be the International Monetary Fund, which was set up to deal with crises where countries run out of foreign exchange (they run out of dollars or yen or whatever) because such crises would interrupt trade (again, I might be off here since my memory is not great). Now, the IMF has taken its broad mandate of providing international financial stability, and become a major player in facilitating the economic development of the less developed countries, something that the founders of the IMF probably didn't care much about.
Anyhow, back to NATO: since the end of the cold war, the alliance has shifted back and forth, moving from deterring the Soviet Union to facilitating the development of civilian control of the military in the East to peace-making/enforcing in the Balkans to counter-piracy/terrorism on the nearby seas (including off of Somalia) to counter-insurgency in Afghanistan and back to deterrence in the East.
The efforts to develop other security organizations in this region have produced mixed results at best, including the EU and the OSCE. Membership makes a difference as the US is not in the former and Russia is in the latter. Which makes for different kinds of institutions. While NATO has enlarged (too far some would say), the basic political dynamics have not changed: the US is more than first among equals but it also keeps the UK, Germany and, yes, France, together on security issues.
Yes, there is a burden-sharing problem, but the US mostly accept it because European security is in US interests. Yes, there are hedges/opt outs built in as nothing, not even Article V (attack upon one = attack upon all), is obligatory, but that is as the US wanted it long ago.
But the various institutions built over 70 years--not just the personnel and procedures in Brussels but the entire apparatus throughout Europe and North America--make it far easier to do stuff in the world. The interoperability that exists is not just about having guns shoot the same bullets and have planes that can refuel other planes. There is political and military interoperability at all levels thanks to years of training together, operating together, and arguing. Starting from scratch would ditch all of that which has been invested, and every new effort would be harder. Indeed, even coalition of the willing operations often depend on the NATO backbone.
So, once again, I paraphrase Churchill: NATO is the worst form of multilateral military cooperation except for all the others. What Churchill really said was: the only thing that is worse than fighting with allies is fighting without them.